Formation of multicellular hepatocyte spheroids in the three-dimensional culture is a potential approach for enhancing liver-specific functions in bioartificial liver (BAL) devices. In this study, as a synthetic extracellular matrix (ECM) for hepatocytes, a highly porous hydrogel (sponge-like) scaffold, 150-200 microm pore size in diameter, was fabricated with alginate (AL), galactosylated chitosan (GC), and heparin through electrostatic interaction. We attempt to select the best condition of AL/GC/heparin sponges for coculture with NIH3T3, as well as compare the liver-specific functions with monoculture. Cell adhesion to GC based on AL film was significantly increased with increasing GC concentration, but not to chitosan regardless of its concentration. The optimal concentration of GC and heparin in AL/GC/heparin sponges to perform the best liver-specific function was 1 and 6 wt% to AL contents, respectively, where albumin secretion were maintained with maximal rates. The mechanical properties in tensile strength of three types of sponges were very slightly different from one another. Cell viabilities performed on AL, AL/GC, and AL/GC/heparin sponges were 68.5, 83.3, and 90.4 % of control, respectively, after 15 days of incubation. Hepatocyte spheroids were more rapidly formed in the AL/GC and AL/GC/heparin sponges, with diameter enlarged to about 100 microm, than in AL sponges. Connexin32 and E-cadherin genes correlated with cell-to-cell adhesion were expressed in hepatocytes within AL/GC and AL/GC/heparin sponges at 36 h after incubation, but not in AL sponges. Treatment of a gap junctional intercellular communication (GJIC) inhibitor, 18beta-glycyrrhetinic acid, indicates that cell aggregation without GJIC does not perform the liver-specific functions for long periods. In the presence of HGF, the level of albumin secretion in AL/GC/heparin sponges was markedly elevated compared to that in AL/GC sponges. Coculture of hepatocytes in AL/GC/heparin sponges with NIH3T3 in a transwell insert resulted in significant increase of liver-specific functions, such as improved albumin secretion rates, ammonia elimination rates, and ethoxyresorufin-O-deethylase activity by cytochrome P4501A1 compared to those in hepatocyte monoculture. The results suggest that hepatocytes as stable spheroids enhance liver-specific functions in AL/GC/heparin sponges, providing a new synthetic ECM to design BAL devices.